Asian stocks advance as Fed maintains low rates

‘GOOD COCKTAIL’:Loose monetary settings and low interest rates are combining with strong earnings reports to boost the outlook for exporters in the Asia region

Agencies, with staff writer

Asian stocks rose for a second consecutive week after the US Federal Reserve renewed its pledge to stimulate growth in the world’s biggest economy with low interest rates, boosting the outlook for the region’s exporters.

“We have a combination of loose monetary settings and low interest rates and strong earnings,” said Nader Naeimi, a Sydney-based strategist for AMP Capital, which has almost US$100 billion under management. “It’s a pretty good cocktail for a good equity market.”

The TAIEX fell 32.90 points, or 0.36 percent, to 9,007.87 on Friday. The benchmark index rose 0.4 percent this week and 3.7 percent this month.

“Ahead of the 9,100 point mark, the market is faced with great technical pressure,” TLG Asset Management (台壽保投信) analyst Arch Shih (施博元) said. “Many investors have been watching this closely.”

Shih said these investors have become wary as they have witnessed other major markets in the region, including China’s, falling amid fears that foreign investors will move funds out of Asia.

“I expect the local bourse will need some time to consolidate to digest the selling,” he said.

Selling was concentrated on large-cap stocks on Friday, in particular optoelectronics firms, after they announced worse-than-expected first quarter results, according to the dealers.

Taiwan Semiconductor (台積電) gained 3.2 percent to NT$73.20 on Friday. The company on -Thursday reported an 8 percent increase in first-quarter profit, more than analysts estimated, after demand for smartphones and tablets drove sales of pricier chips. Goldman Sachs boosted its rating on the stock to “buy” from “neutral” before the results, citing valuations and the company’s growth outlook.